Better Technology, New MarketsThe report looks at case studies that illustrate governance lessons and recommendations to assure that fish resources deliver their full contribution to economic growth. Foreign... Show More + arrangements can offer better technologies for fishing and processing while opening up new and more profitable markets for fish products.In the Western Pacific, regional cooperation between neighboring coastal states has allowed greater returns to all countries involved in the tuna fishery. By defining access rights and putting into place uniform and cooperative surveillance and management systems, these small-island developing states have gained more control over their tuna resources. Furthermore, competitive arrangements for distant water nations involved in tuna fishing services significantly increased the flow of benefits to domestic development."All of our efforts are underpinned by a strong commitment to sustainable resource management," said Movick. "Some indicators of recent success include a near doubling in the value of tuna catch from FFA waters between 2007 and 2013 and a quadrupling of access fees in that period. There has been a 50% increase in employment of Pacific Islanders in the tuna fishery from 12,000 to 18,000 jobs over the same period.”Improving Governance and Securing Access RightsThe report distills the lessons learned from case studies into nine key recommendations to improve foreign access arrangements. Among them, the report emphasizes the importance of effective governance and access rights for all fisheries within a country’s exclusive economic zone.“The case studies provide critical practical caveats and important governance lessons,” says Tim Bostock, World Bank Senior Fisheries and Oceans Specialist. “As sovereign resource owners, governments of coastal developing countries are ultimately accountable to their populations for the productive use of natural resources, enabling their contribution to economies, welfare and shared prosperity. Without doubt, foreign fishing arrangements as a form of free trade in fishing services could make important contributions to this objective.”The report strongly recommends that all domestic participants in the sector, especially small-scale fishers, must be involved in decision making not only on policies aimed at secure and enforceable tenure and use rights, but also in regard to future foreign fishing.These conclusions reinforce the recommendations of the Blue Ribbon Panel in their report Indispensable Ocean: Aligning Ocean Health and Human Well-Being. The panel of experts and leaders from around the world and across sectors advised that investments must equitably respond to needs of all users of ocean resources and also sustainable use of the environment. Trade in Fishing Services provides further guidance on policies and practices that align ocean health and human well-being.Analyzing the Legal Principles that Underpin Foreign AccessThe report reveals significant legal ramifications. Coming into force some 31 years ago, the United Nations Convention on the Law of the Sea (UNCLOS) has generally been interpreted to suggest that coastal states are obliged to make available their ‘surplus’ fish stocks to exploitation by other states. The report reveals that, in fact, coastal states have no obligation to do so and need only engage in foreign access arrangements should it be in their economic interest to do so. The report queries the extent to which this fact has been misinterpreted in the past; it also queries the extent to which some developing coastal states may have entered into foreign access arrangements on the assumption that they were obliged to do so under this Convention.This report should help inform coastal states of their rights under international law so they may allocate fish resources and services with economically and socially beneficial strategies.With better and more transparent arrangements, there is an optimistic vision for the future of fish stock, human well-being and international cooperation. Show Less -

Who is most at risk?The new study, part of an ongoing OECD project, examined maps and databases of population and world assets, flood-prone regions, storm frequency data, and cost of damage models for... Show More + 136 large coastal cities. For the first time, it took into account existing coastal defenses and their level of protection.In terms of the overall cost of damage, the cities at the greatest risk are: 1) Guangzhou, 2) Miami, 3) New York, 4) New Orleans, 5) Mumbai, 6) Nagoya, 7) Tampa, 8) Boston, 9) Shenzen, and 10) Osaka. The top four cities alone account for 43% of the forecast total global losses.However, developing-country cities move up the list when flood costs are measured as a percentage of city gross domestic product (GDP). Many of them are growing rapidly, have large populations, are poor, and are exposed to tropical storms and sinking land. The study lists the 10 most vulnerable cities when measured as percentage of GDP as: 1) Guangzhou; 2) New Orleans; 3) Guayaquil, Ecuador; 4) Ho Chi Minh City; 5) Abidjan; 6) Zhanjing; 7) Mumbai; 8) Khulna, Bangladesh; 9) Palembang, Indonesia; and 10) Shenzen.In most of these cities, the poor are most at risk as rapid urbanization has pushed them into the most vulnerable neighborhoods, often in low-lying areas and along waterways prone to flooding. Taking action nowOne warning from the study's findings appearing in the journal Nature Climate Change is that the cities where flood risk will increase most are not the cities where the risk is particularly high today. Port cities that haven't been highly vulnerable in the past are among those facing the greatest increase in risk by 2050. Leading the cities with the greatest increase in risk are Alexandria, Egypt; Barranquilla, Colombia; Naples, Italy; Sapporo, Japan; and Santo Domingo, Dominican Republic. “Coastal defenses reduce the risk of floods today, but they also attract population and assets in protected areas and thus put them at risk in case of the defense fails, or if an event overwhelms it. If they are not upgraded regularly and proactively as risk increases with climate change and subsidence, defenses can magnify – not reduce – the vulnerability of some cities,” Hallegatte said. With better defenses, more people will be dependent on dikes and sea walls, and losses when those defenses fail to protect the city will get bigger. Along with better structural defenses, cities will need better crisis management and contingency planning, including early warning systems and evacuation plans, Hallegatte said. In cities where flood damage hasn't been common, spending money on flood defenses can be politically unpopular. The challenge facing government officials today is investing in protection before the damage occurs. For small countries, protection and preparation are especially important. A devastating flood in a key city can stall the entire economy of a small country, making recovery and reconstruction even more difficult. For all of the cities, the preparation will save lives and money in the future. Show Less -

Forests have a central role to play as the world confronts the challenges of climate change, food shortages, and improved livelihoods for a growing population. If predictions prove correct, the world will... Show More + need to shelter, feed, clothe, and provide livelihoods for another two billion people by 2050. This presents a staggering challenge, particularly given new research from the World Bank showing that world temperatures could rise by 4 degrees Celsius this century, impacting water availability, agriculture, and severe weather events. By 2025, two-thirds of all nations will confront water supply stress, and 2.4 billion people will live in countries unable to provide sufficient water for basic health, agriculture, and commercial needs.For centuries, forests have served as a kind of natural safety net for communities during times of famine or other events that impact agricultural and food production; they provide fruits, leaves, gum, nuts, timber, and wood for fuel. Forests feed people and the animals they might depend on for trade or meals when crops fail.At the same time, many of the world’s remaining forests are under increasing threat because of human activities and climate change. Although the pace of deforestation has slowed in some regions, the world still loses about 14.5 million hectares of forests each year. In parts of the Amazon rainforest, rising temperatures and changing rainfall patterns are connected with the increased risk of catastrophic dieback with dangerous local, regional and global consequences. In the Congo Basin, a recent analysis of deforestation trends published by the World Bank, highlights the intense pressure that agricultural expansion, mineral exploitation, growing energy needs, and an improved transportation network will pose to the integrity of this vast rainforest area.If countries are able to pursue inclusive green growth strategies that overcome some of the more severe trade-offs between growth and forest protection, the deforestation that has historically accompanied development in many countries could be slowed, making an important contribution to climate change mitigation.If the world is to confront the challenges of mitigating and adapting to climate change while meeting the demands of a rapidly-growing global population, it is vital that we find the balance between conserving and regenerating forest areas with economic growth for poverty reduction.This is what the World Bank’s work on forests aims to achieve.The World Bank’s approach to forestsA little over 10 years ago, the World Bank shifted course on its forest strategy to better reflect the reality that a forest is not simply a physical asset that can be cleared, logged or protected. In fact, a forest influences – and is impacted by – linkages to an array of other activities and sectors, particularly agriculture and water, but also energy, mining and transportation at the local, national and even global level. In its 2002 Forest Strategy, the World Bank spelled out this understanding and pledged to support countries in their efforts to harness the potential of forests to reduce poverty, better integrate forestry into their economies, and protect and strengthen the environmental role forests play, locally and globally.These three objectives have underpinned the World Bank’s work with governments, communities, and private enterprise across all the relevant sectors connected with forestry. In all, the Bank approved 289 forest-related projects in 75 countries between 2002 and 2011. The examples below provide a snapshot of some of the results accomplished in three thematic areas in that time.More resilient, integrated landscapes for poverty reductionOver the centuries, the world has experienced vast forest loss with the spread of agriculture and population growth. To reverse deforestation trends requires a change in policies and laws, institutions, and incentives, in and beyond the forestry sector. This “landscape” approach embraces activities such as restoring degraded forest land, boosting agricultural productivity, realigning farm and forest incentives to protect forests from being converted into farmland, introducing trees on farms and ranches, and involving local communities more directly in the design and oversight of forest management.The World Bank also emphasizes the benefits from integrating different farming approaches – including crop production, livestock, and tree farming – into one area, to diversify livelihoods, increase resilience to economic and climate shocks, and capitalize on natural synergies, for example in the water, carbon and nutrient cycles.In China, the World Bank was the biggest financier of an ambitious plan to increase forest cover after devastating floods along the Yangtze River. Between 1985 and 2007, the World Bank supported China's forestry sector through 8 projects covering 21 provinces, resulting in over 3.8 million ha of newly established forests (around 12 percent of the country's newly planted forests). Besides mitigating greenhouse gas emissions and reducing soil erosion, the increase in forest cover has had significant impacts on people’s livelihoods. One project specifically targeted poor areas in 12 provinces, training farmers to plant and care for a range of profitable trees. Economic trees like chestnut, gingko and bamboo helped boost average annual income by 150% between 1998 and 2004.In Albania, the World Bank worked with the government on a forest project that showcased the benefits of this landscape approach. By integrating forest, pasture, and agriculture management, the Bank-backed initiative led to reduced carbon emissions, the protection of important watersheds, and an increase of 28 percent in incomes in some areas from forests and agriculture. The project was successful in bringing more than 775,000 ha of land under the management of local communities.In Ethiopia’s Great Rift Valley, the World Bank partnered with World Vision to pilot an approach that was both integrated and inclusive and led to large-scale landscape restoration with significant livelihood and resilience outcomes. Forest cooperatives were created to oversee the reforestation of the Humbo mountain area by encouraging natural regeneration and limiting wood, charcoal and fodder extraction. Improved land management has stimulated grass growth, providing fodder for livestock that can be cut and sold as an additional source of income. The restored project area provides protection against dangerous landslides and improved water availability for more than 65,000 people. The project is expected to sequester over 880,000 metric tonnes of carbon dioxide-equivalent over 30 years, with the World Bank purchasing 165,000 metric tonnes worth of carbon credits through its BioCarbon Fund.These projects point to the tremendous potential to boost people’s physical and financial security by restoring degraded forest land. Worldwide, an estimated 2 billion hectares of lost or degraded forest landscapes could be restored and rehabilitated. If those “landscapes of opportunity” were to be restored to functional and productive ecosystems, they could help deliver a triple win by improving rural livelihoods and food security, increasing climate resilience, and helping mitigate greenhouse gases - while taking pressure off pristine forests.Managing natural capital for economic growthIn forest-rich countries, forestry can be a source of economic growth and employment. More than 160 million people worldwide find work through forest enterprises. If harvested responsibly, forests are also a renewable source of building material, fiber and fuel – tremendous assets as the world looks to reduce the carbon footprint of human activities. At the same time, forests are one of the most mismanaged resources in many countries, partly because they are undervalued and partly because poor governance has fuelled illegal activities.Helping governments to improve economic policy and the management and governance of the forest sector is therefore an important priority. The World Bank’s starting point is to ask how can practices that have often led to significant forest degradation, tax evasion and corruption, be reformed, so that forests contribute more revenue to the state, produce more and better jobs, and result in more sustainable development?The costs of inaction are severe. Worldwide, the failure by governments to collect royalties on the legal use of forests, costs them as much as US$5 billion a year in lost income. Illegal logging costs another US$10-US$15 billion every year in countries in which each dollar of state income is needed to reduce poverty. This sum is more than eight times the amount of money available from official developmental assistance (ODA) for the sustainable management of forests.The causes of illegal logging and other forest crimes are complex, and often lie outside the forestry sector. Weak governance, including unclear or nonexistent policies or legislation on the use of forest resources is a key issue. Weak institutional structures and an inability to monitor and enforce regulations also hamper progress in many countries. These weaknesses are difficult to address politically, since well-connected interest groups tend to benefit from the status quo and resist change.However over the last decade, the World Bank, the European Union and other partners have made significant strides in opening the space for dialogue and reform by backing Forest Law Enforcement and Governance (FLEG) processes in different parts of the world. The Program on Forests (PROFOR), hosted by the World Bank, has also made forest governance one of its priority issues, providing technical assistance to improve the monitoring of forest activities and helping create consensus and political will around priority reforms.Dialogue and engagement with developing countries has led to progress in the way forest rights are allocated. For example, in Cameroon, legal and regulatory reforms that were part of a wider concession reform effort resulted in the first legal recognition of community forests in any part of West Africa. In the Democratic Republic of Congo, a legal review of concessions led to a significant reduction in the area under concession management, to 9.7 million ha in 2008, from 43.5 million ha in 2002. At the same time, steps were taken to bring communities into decision-making processes in forest management, to clarify the rights of traditional forest users, and to develop new models for payments for environmental services. And in Gabon, around 4.7 million ha in forest concessions were cancelled, creating the opportunity to develop new approaches to sustainable forest management.In Mexico, where some 80 percent of forests are owned by indigenous and other communities, the World Bank helped fund a project to strengthen community forestry by improving forest management plans. The support, which was rolled out in phases since 1997, helped increase the contribution of forests to local development. For example, a project evaluation found that between 2003 and 2008, jobs had increased by 27% in targeted communities and ejidos, while the net value of forest goods and services they produced increased by 36%. In 2011 the coverage of this support was extended to all 32 states in Mexico.In Liberia, a forest-rich West African country where timber was once used to purchase weapons and fuel a devastating civil war, forest policy reform has slowly allowed the country to resume selective logging activities within an improved legal framework in which sustainable forest management principles, community rights and conservation needs are formally recognized. In 2010-2011, the World Bank, through the Program on Forests, stepped in to co-finance the roll out of a “chain of custody” system that tracks timber from the forest of origin to the point of export through barcodes and data forms. That system assisted in securing more than $27 million in net tax revenue for the state in 2008-2012. Although many implementation challenges remain, these reforms have benefited the country by creating greater transparency around logging revenue and a platform for stakeholders to demand more effective change.Through its private sector arm, the International Finance Corporation, the Bank Group has also encouraged responsible corporate investments across the forest products supply chain and worked to create a more level playing field for legitimate forest-sector enterprises that adopt sustainable forest management practices. For example, IFC started investing in 2003 in a company that produces high-quality particleboard products for the construction industry. The company has achieved Forest Stewardship Council certification for its 230,000-hectare concession in Russia, while encouraging third party suppliers to adhere to sustainable forest management practices.Valuing and preserving environmental servicesForests provide many essential environmental services, from absorbing and stocking carbon that would otherwise contribute to climate change, to regulating water cycles, hosting 80 percent of the world’s terrestrial biodiversity (including pollinators crucial to food security), maintaining soil quality, and reducing the risks of natural disasters such as floods at a time when many of these systems are coming under tremendous pressure. While these services have been difficult to quantify and value in the past, new research into natural capital accounting, innovative market approaches, and political awareness have contributed to a growing appreciation for the preservation of natural resources.The challenge for policy makers is to bring these values into markets, into decisions that affect more than one sector, and into macroeconomic and development policy in general. Over the last decade, the World Bank has worked with partners to increase financing for forest conservation and protection, and has been engaged in the development of effective markets for the environmental services that forests provide, including biodiversity protection, carbon sequestration, and watershed management.For example, the Bank played an active role in promoting the establishment of protected areas in the Brazilian Amazon. Bank teams worked for several years with local and federal authorities and non-governmental organizations (NGOs) including the World Wildlife Fund to protect Amazonian forests. The Amazon region accounts for an astonishing 30 percent of the world’s remaining tropical forests and about half of all the species on the planet but it has been under threat from the growth of agricultural and livestock areas and other logging activities. In its first phase, the Amazon Region Protected Areas project (ARPA) helped designate around 24 million hectares of new protected areas, an area roughly equal in size to the United Kingdom. Additionally, the project helped classify 45.4 million hectares as indigenous lands and set aside 2.1 million hectares into special reserves for sustainable, community-managed use. The project tackled successfully some of the daunting concerns in ecosystem protection today: enforcement of environmental laws in remote areas; the needs and aspirations of rural people for improved livelihoods; and the valuing and funding of conservation activities against a wider backdrop of ongoing resource exploitation. In its second phase, ARPA will cover nearly 70 million hectares of rainforest, saving more than 1.1 billion tons of CO2 emissions through 2050.The Bank Group has also explored a wide range of opportunities to help developing countries reduce greenhouse gas emissions from deforestation and forest degradation, and to conserve, sustainably manage and enhance forest carbon stocks. This approach, known as REDD+, will likely rest on a complex mix of multilateral and bilateral assistance, civil society efforts, private sector initiatives and carbon markets. The Bank’s approach has been to prepare and pilot different REDD+ initiatives through partnerships.The Bank serves as the Trustee and the Secretariat of the Forest Carbon Partnership Facility (FCPF), a global partnership that is helping countries draft REDD+ readiness plans and will provide carbon payments to countries that meet certain targets. The Bank is also the implementing organization, together with other multilateral development banks, of the Forest Investment Program (FIP), and is financing pilot investments for reforestation and soil carbon through the BioCarbon Fund, a public-private initiative that mobilizes resources for pioneering projects that deliver emission reductions, while promoting biodiversity conservation and poverty alleviation. Those interventions, blended with more conventional World Bank lending activities, are converging to create transformative change in the forest and broader rural sector in places like the Democratic Republic of Congo and Mexico.Such alliances are critical to ensuring the world has the funds necessary to confront the vast array of challenges in protecting and better managing forests. While the World Bank currently is the largest single source of finance in the multilateral community for forest projects, its loans and grants are only a fraction of what is needed to navigate the trade-offs between forest protection and economic growth and secure a prosperous and sustainable planet for future generations. Show Less -

June 6, 2012 - The upcoming Rio+20 meeting on the environment could inspire a new generation of leaders to take a greener, longer-term view of development, said World Bank Vice President Rachel Kyte in... Show More + an online chat in English and Spanish on World Environment Day.More than 500 people participated in the discussion on what the United Nations Conference on Sustainable Development in Rio de Janeiro June 20-22 needs to deliver to create a more sustainable world.Fielding questions from Pakistan, Eritrea, Mexico, Peru and other countries, Kyte said countries need to keep growing to raise living standards and overcome poverty, but they also need to grow greener – something all countries can do, whether they are rich, poor, or somewhere in between.“...time is our greatest enemy,” said Kyte. But many people in government, industry, and civil society are ready to move forward even without global agreements, she added. “Sector by sector, city by city, region by region we can make progress.”At Rio, the Bank will strongly advocate that countries follow the lead of Colombia, Costa Rica, Botswana and others that have adopted “natural capital accounting.” The method factors in natural phenomena and environmental “services”—such as storm protection provided by mangrove trees--that are usually invisible in national budgets.Ten African countries endorsed the need to move to this new system of accounting at the Summit for Sustainability in Africa in May. The Bank hopes 50 countries and 50 companies will join the effort in Rio, Kyte said.“…We need to be able to take the long term into our thinking, planning and valuation at the heart of our economic decision making,” said Kyte. Natural capital accounting is a key part of the Bank’s new environment strategy released June 5, which aims at helping countries pursue sustainable development pathways and lays out a vision for “a green, clean and resilient world for all.”Kyte said the Bank will also highlight the Global Partnership for Oceans at Rio. The new alliance convened by the Bank in the spring has set goals to halt or reverse destruction of ocean resources.“The numbers on the state of the world’s oceans are disturbing,” said Kyte. “Eighty-five % of fish stocks fully exploited, over exploited, or depleted; 35% of costal mangroves lost; 20% of corals damaged or destroyed. This is not a sustainable situation.”The 1.5 –hour online chat also covered topics including pollution, clean technology, sustainable tourism, governance, enforcement of environmental laws, agriculture’s contribution to green growth, the Bank’s work in indigenous communities, and the need to involve young people in future efforts.“The youth voice has urgency - appropriate urgency - but also has a perspective of the now and future which is different. We need that perspective,” said Kyte.Some 50,000 people, including representatives of civil society, indigenous groups, and youth organizations, are expected to attend the Rio gathering, said the Bank’s Chief Economist of Sustainable Development Marianne Fay. She joined Kyte in answering questions in Spanish.Their voices are important as the world strives for more efficient, cleaner, more durable and more equitable growth, said Fay. One of the main messages of the Bank’s new report on green development is the importance of action at the local level. “Urban planning and urban transport well done ensures a strong local economy, a more integrated labor market, less pollution and less congestion,” Fay said.The online audience submitted more than 40 questions prior to the event. Kyte said she would answer many more of them in an upcoming blog post. Show Less -

For many low-income countries, natural capital is a critical asset, making up nearly 36 percent of their total wealth. The poorest communities depend on oceans, forests, and soil productivity for their... Show More + daily existence, and as they grow, the pressure on land and water is increasing, threatening ecosystems and livelihoods in countries with few resources to cope with the loss.Protecting these vital resources requires reliable data and measurement systems that can ensure they are taken into consideration during development decision making.The latest edition of the World Bank’s Little Green Data Book, released on May 17, provides part of that equation with comprehensive data on more than 200 countries’ natural capital, including agricultural land, forests, protected areas, and water resources — information that can help policymakers, communities and other stakeholders weigh the value of natural resources and their role in development.That information—paired with a natural capital accounting system of measuring national wealth—allows the value of such assets, as well as the costs and benefits of developing them over time, to be measured and factored into assessments of a country’s wealth and growth prospects.Accurate data on countries’ natural capital can help governments and communities anticipate the broader impacts of competing development options, gauge the sustainability of various practices and activities, make provisions for likely losses and seek trade-offs that optimize their resources.“Natural capital accounting lets us see who benefits from and who bears the cost of ecosystem changes, and helps to develop resource-management approaches that support the poorest communities while promoting more sustainable growth,” said World Bank Environment Director Mary Barton-Dock.Among other sustainability measures, the Little Green Data Book 2012 includes an Adjusted Net Savings indicator—also known as “genuine savings”—which calculates the true rate of savings in an economy after taking into account investments in human capital, depletion of natural resources and damage caused by pollution. It also includes an Adjusted Net National Income indicator, which provides a broader measure of national income that accounts for the depletion of energy, mineral and forest resources.This year, a new set of indicators on marine wealth is introduced, highlighting the role of oceans in economic development and the dramatic decline of oceans’ health. It highlights that 85 percent of the world’s ocean fisheries are fully exploited, over-exploited or depleted; excess nitrogen runoff from fertilizers has resulted in large “dead zones” in the ocean, covering some 250,000 square kilometers; an estimated 35 percent of global mangrove have been lost or converted; approximately 20 percent of the planet’s coral reefs have been destroyed in the last few decades, with a further 20 percent being degraded; and 30 percent of sea grass beds have been destroyed.The Bank estimates that global fisheries wealth, if better managed, could increase from $120 billion to $900 billion, with the potential for the greatest gains in Asia. Marine fisheries are particularly important for Small Island Developing States and many coastal communities both in the developing and developed worlds.“Such potential gains and losses from different development options should be made explicit when world leaders, government representatives, civil society, the private sector, and other stakeholders come together at Rio+20 to draw up a roadmap for greening global economic growth,” said Mary Barton-Dock.Through the Little Green Data Book and the Wealth Accounting and Valuation of Ecosystem Services (WAVES) partnership, the World Bank is contributing to countries’ efforts to incorporate their natural capital into national accounts to inform priority-setting and decision-making.Information in the Little Green Data Book and other related data are freely available online at data.worldbank.org as part of the World Bank’s Open Data Initiative. Show Less -

Over the last 20 years economic growth has lifted more than 660 million people out of poverty and raised the income levels of millions more, but growth has often come at the expense of the environment.A... Show More + variety of market, policy and institutional failures mean that the Earth’s natural capital tends to be used in ways that are economically inefficient and wasteful, without sufficient reckoning of the true social costs of resource depletion, and without adequate reinvestment in other forms of wealth. These failures threaten the long-run sustainability of growth and progress made on social welfare. Moreover, despite the gains from growth, 1.3 billion people do not have access to electricity, 2.6 billion have no access to sanitation, and 900 million lack safe, clean drinking water. In other words, growth has not been inclusive enough.Economic and social sustainability, on the one hand, and social and environmental sustainability, on the other, have been found to be not only compatible, but also largely complementary. Not so with economic and environmental sustainability, as growth has come largely at the expense of the environment—hence the dotted line on this figure—which is why green growth aims to ensure that economic and environmental sustainability are compatible.Developing countries have options other than to “grow dirty and clean up later.” Much that is useful can be done now: clean air and water and solid waste management are basic needs, and many environmental policies enhance productivity and poverty alleviation. So while poor countries should focus on meeting basic needs and expanding opportunities for growth, they need not do so at the expense of unsustainable environmental degradation. Further, environmental performance does not automatically improve with income, so policy action is needed anyway. Finally, it may be impossible or prohibitively expensive to “clean up later,” either because of the irreversibility of environmental damages like the loss of biodiversity, or because “lock-in” will make subsequent shifts to more environmentally benign structures and processes extremely costly.The future we wantWell-designed inclusive green policies improve social welfare, taking into account not only present but also future generations. Yet policy makers are also naturally concerned with the potential trade-offs and costs, as well as the potential co-benefits, of green policies for near-term growth and employment. Careful case-by-case analysis will be needed to find optimal strategies, but there is considerable evidence that near-term costs can be minimized through the use of well-designed regulations and market-based policy instruments that promote least-cost ways of protecting the environment. Green growth can then provide a pathway to more sustainable development that reconciles the urgent need for sustained growth with the imperative of avoiding lock-in to unsustainable growth patterns and irreversible environmental damages. Green growth is not anti-growth; rather, it represents a change in how we manage economies to reflect a broader conception of what constitutes effective and sustainable growth.The ability and will to value natural capital underpins the transition to greener growth. Environmental assets – water, land, air, ecosystems and the services they provide – represent a significant share of a country’s wealth. Just like physical and human capital, natural capital requires investment, maintenance, and good management if it is to be productive and fully contribute to prosperity. To accurately measure progress toward greener growth, countries will find it useful to implement comprehensive wealth accounting and valuation of ecosystems alongside their more conventional measures like GDP.Critically, there is no single green growth model. Green growth strategies will vary across countries, reflecting local preferences and contexts. Any single set of “best practices” should be imported with care. Nonetheless, all countries, rich and poor, have opportunities to make their growth greener and more inclusive without slowing it.How to get thereGreening growth requires policies that are on their own terms good for growth, as well as for the environment, such as reforming energy subsidies or trade barriers that protect pollution-intensive sectors. It entails politically difficult reforms in the patterns of pricing, regulation, and public investment, and it calls for complex changes in behaviors and social norms. Importantly, green growth requires knowing when to go for the politically expedient rather than the economically optimal.The World Bank’s new report, Inclusive Green Growth: The Pathway to Sustainable Development, outlines a three-pronged strategy for pursuing greener growth:Prong 1 – Tailor national inclusive green growth strategies to a country’s circumstances, with an emphasis on maximizing local and immediate benefits and avoiding lock-in. Optimal solutions will differ across countries with varying degrees of institutional capacity, transparency, accountability, and civil society capacity.Prong 2 – Promote efficient and sustainable decision-making by policymakers, consumers, and the private sector. The use of pollution charges and other market-based instruments are important because they help incentivize efficiency and spur innovation. An array of complementary approaches will be needed to nudge individuals toward better behaviors and to unleash the power of the private sector. Critically, while we are still far from accurate pricing for ecosystem services, they are clearly valuable. Natural assets should be systematically incorporated into national accounts. The UN Statistical Commission adopted the System of Environmental and Economic Accounting as an international standard in February 2012, providing a broadly agreed methodology. Neglecting natural capital, like neglecting human and physical capital, is bad economics and bad for growth.Prong 3 – Meet up-front capital needs with innovative financing tools. Given the scarcity of fiscal resources, governments and multilateral financial institutions must work urgently to increase the role of the private sector in green investment. Private-public partnerships are crucial, as is increasing access to financing for small and medium enterprises.Ultimately, much of what is needed to green growth is good growth policy, which aims to get prices right and fix markets, address coordination failures and knowledge externalities, and assign property rights. But green growth policies are no panacea for structural shortcomings in an economy: environmental measures cannot offset macroeconomic instability, distorted labor markets, poorly regulated financial systems, or hostile business environments.Moreover, while greener growth can be made affordable, achieving a green economy overnight cannot. Rapid shifts would entail much slower growth at least in the short to medium run. Conversely, avoiding a brutal transition is a strong incentive to start acting now. Show Less -

Prong 1: Tailored strategies that maximize immediate benefits and avoid lock-inGreen growth policies require governments to do a better job of managing both markets and governance. Inclusive green growth... Show More + strategies and policies must be tailored to a country’s circumstances—its physical endowments, its social, economic and environmental challenges, and its institutional capacity. Even sophisticated administrations may struggle with some market-based instruments, as experience with the European Trading System has demonstrated. The optimal solutions will differ across countries with varying degrees of institutional capacity, transparency, accountability, and civil society capacity.Three strategies apply globally:Maximize local and immediate benefit: Green growth strategies need to address the political economy of reform as wll as the urgent needs that characterize most developing countries. Designing policies to maximize immediate, local benefits that are visible, such as increased efficiency and productivity, safety and resilience, job creation, and poverty alleviation, can help ease the transition.Avoid lock-in: Strategies should also focus on the sectors and interventions that are most urgent—those that can help to prevent irreversibility or reduce inertia. It is easier to build up renewable energy later than to attempt to reverse poor land-use planning that has resulted in sprawling cities. Good land-use planning and urban public transport also provide important local and immediate benefits by reducing congestion and favoring denser, more energy-efficient development.Actively manage the political economy of reform: Sound information and data about winners and losers enables an information campaign and compensatory measures to be tailored to potential critics. One way of improving public decisions and priority-setting is to inform decision makers of the value of the services provided by natural ecosystems, so the value can be compared directly with the economic costs and benefits of their decisions. Natural capital accounting can help decision makers understand trade-offs between economic interests and natural assets, such as the loss caused by building a road through a rain forest. China’s growth would be much lower than its official GDP growth of nearly 10 percent a year if environmental depletion and degradation were included.Prong 2: Measures that incentivize smart decision makingWhile the information provided by green accounting can help inform the debate on political choices and public investments, it does not constitute an incentive. Influencing people requires sharing information, collecting reliable data, and making the right choices the easy default for the population, as well as providing safety nets for the poor when prices are realigned, such when subsidies are removed.Companies also have a major role to play in providing solutions to green growth. Through their capacity to innovate and adjust their production processes, they are key to controlling the cost of green policies. Governments need to influence their behavior, as well, by providing appropriate incentives and regulations.Use information: Companies are subject to pressures from their customers, stakeholders, and investors, and this pressure can be used to green their behavior. Promoting transparency and access to information on environmental impacts can create social pressure to reduce these impacts. In China, Indonesia, the Philippines, and Vietnam, performance evaluation and ratings programs that reported emissions data and assessed plants’ environmental performance helped a large number of plants initially rated as “noncompliant” rise to “compliant” (in contrast, plants rated as “flagrant violators” and “compliant” stayed in those categories).Impose where it makes sense: Market and price instruments can be difficult to implement and enforce, they lack predictability and credibility over the long term, and they may be inefficient when economic actors do not take them fully into account, such as not fully valuing fuel economy when buying a car. This is why it is sometimes easier to implement norms and regulations, as Australia, Canada, China, the European Union, Japan, Korea, and the United States have done for car fuel efficiency standards.Use innovation and industrial policy, but with caution: Prices are notoriously limited instruments for transforming economies or triggering investments with long-term or uncertain payoffs. Since they depend on government actions, they have long-term credibility and predictability issues. They also cannot address the “classic” market failures that are usually invoked to justify innovation or industrial policies: increasing returns and knowledge externalities in new industries, information asymmetries, capital market imperfections, and the coordination needed across different sectors to permit a technological transition. As a result, most countries resort to some form of innovation and industrial policies in their growth strategies. Such policies need to be used with care and tailored to the country context.The best way to accelerate technology diffusion is to reduce trade barriers. In China, photovoltaic panel fabrication technologies were introduced mainly through the import of manufacturing equipment from Europe. Also critical are policies to increase adaptation and adoption capacity through education and training as well as trade and industrial policies, such as local content requirements.Several developing countries are pursuing green industrial policies—biofuels in Brazil and solar energy in China and Morocco. Lessons from past successes and failures of standard industrial policies are clear: governments should subject companies to competition, have clear sunset clauses, and focus on well-identified market failures, spillover, or latent comparative advantages, such as solar potential in North Africa. But most green industries will require some type of policy support. Typically, environmental policy, such as a carbon tax, should address the environmental externality, while the standard tools of innovation and industrial policies are used to address knowledge externalities and other market failures such as economies of scale and coordination failures.Prong 3: Innovative financing toolsEven when environmental or green infrastructure policies and investments pay for themselves, they can involve significant up-front costs and require specific financial tools. For this, innovative financing is urgently needed.Recent estimates for climate change mitigation suggest that a package of public sources—including a redirection of subsidies currently destined for fossil fuels; multilateral development bank flows; and carbon offset flows—could leverage some US$200 billion to US$400 billion in 2020 in additional private flows. This is close to the expected investment needed to stay below 550ppm CO2-eq, but about half of what likely will be needed to stay below 450 ppm CO2-eq.Many of the needed investments could benefit from public-private partnerships. Private participation in infrastructure has grown at a steady pace, about 13 percent a year, over the past 20 years, but it remains concentrated in a few middle-income countries and a few sectors.New investments in renewable energy are largely private—some US$143 billion of the US$211 billion invested in renewables in 2010—but 82 percent of private renewable energy investments that take place in developing countries occur in Brazil, China, and India. The need for innovation, efficiency, and “smart investments” (smart grids, smart transportation, and smart houses) makes the role of the private sector even more critical in green growth policies than it already is in traditional infrastructure finance.Three weaknesses hold back private financing of infrastructure:The scarcity of resources to prepare projects and bring them to a stage at which they are “bankable.” Developing-country governments are often reluctant to borrow to prepare uncertain projects, while private investors are unwilling to invest in preparing a project they may have to bid for and not win.The mismatch between the tenor of the funds available given the preference of investors for short-term funds, and the needs of infrastructure for long-term funds of 15–25 years. Few developing countries have well-developed capital markets or banking institutions able to transform short-term deposits into long-term products, and not enough refinancing tool options are available.The challenge of cost recovery. The ability to charge at full cost is behind the massive expansion in telecom services. Few other infrastructure sectors are able to do so, although where they have, investors have come, as they did in Colombia’s water sector. Solutions include measures to price infrastructure services close to cost recovery, while ensuring affordability for low-income households.Another weakness springs from the additional policy risk created by the fact that the profitability of green investments is often dependent on public policies, such as feed-in tariffs or environmental taxation. Spain’s retroactive reductions in solar feed-in tariffs, and Germany’s and France’s decisions to reduce the amount of support for future projects, plus the lack of progress on a U.S. energy bill all combined to depress the private sector’s appetite for renewable energy investments in 2010. As a result, clean energy share prices dipped, reflecting investor concerns, despite continued strong government support for renewable energy in China.Renewable energy and energy efficiency illustrate the need for innovative public financing instruments. Renewable energy is capital intensive with a long payback period. Energy efficiency suffers from the fact that most local banks rely on balance sheet financing, rather than project-based financing that is based on the cash flow generated by the investments.The public sector, international financial institutions, and bilateral donors can help by providing funds for project preparation as well as concessional elements for pioneer investments. Such support can go a long way toward changing risk-return profiles and giving investors more confidence in the long-term viability of their projects.More generally, well-designed public finance mechanisms help to mobilize private investments in energy efficiency and renewable energy. In the case of renewable energy and energy efficiency, the following tends to have the greatest leverage:Credit lines or guarantee instruments to engage private banks. The experience of the International Finance Corporation is telling: between 1997 and 2011 some US$65 million in concessional funding, primarily for risk-sharing facilities, generated US$680 million in sustainable energy finance investments.“Fund of funds” under which the government invests a relatively small amount of long-term capital in a range of private, professionally managed funds that then invest in clean energy or energy efficiency Public funds to reduce interest rates for consumer financing, typically through financial institutions or utilities.In addition, energy service companies, which provide clients with energy auditing, propose energy-savings measures, and financing, can help consolidate multiple small transactions. Payments for environmental services—by which farmers and landowners are compensated for maintaining their land’s ability to provide ecosystem services, such as the regulation of water flows, water purification, control of soil erosion, and habitats for wildlife—are also promising, but underutilized.From a Pragmatic Point of ViewThis report approaches green growth from a pragmatic point of view. The current model is not just unsustainable, it is inefficient. Improving it is good economics, so let’s fix market failures, internalize externalities, assign property rights, improve governance, and influence behaviors.The costs will depend on the degree of ambition. Rapidly and dramatically decreasing our impact on the planet would be very costly. So, too, would delaying action that leads to greater expenses down the road. Neglecting natural capital, like neglecting human and physical capital, is simply bad management, bad economics, and bad for growth. Show Less -

Rapid urbanization and climate change are reshaping and exacerbating disaster risk. Together, they have added urgency to the task of building resilience in communities and countries around the world.Climate... Show More + extremes that we could hardly imagine and cope with every 20 years are going to happen every two years in this century. This is the message of a sobering report from the Intergovernmental Panel on Climate Change about the dramatic climate extremes that are expected to increase around the world.Meeting on the margins of the World Bank/IMF spring meetings on April 20 to discuss the implications of the report for their work on building resilience, donors, developing countries and international organizations reaffirmed their commitment to making disaster resilience a priority in development planning. The group of leading officials also agreed that integrating disaster risk reduction and climate change adaptation into the development agenda is critical to building resilience in communities and countries."We have too often witnessed how disasters can roll back years of development progress," said World Bank Managing Director Mahmoud Mohieldin. "On top of that, we now need to prepare for a changing world—rapid urbanization and a changing climate are reshaping and exacerbating disaster risks.""But as we discussed today, geography need not be destiny, and the future—however uncertain and unpredictable when we factor in the impact of climate change—need not be feared if correct preventive policies are taken today.”Convened by the European Union, the Government of Japan, and the World Bank/GFDRR (Global Facility for Disaster Reduction and Recovery), the Resilience Dialogue was informed by last month’s IPCC report Managing the Risk of Extreme Events and Disasters to Advance Climate Change Adaptation.Christopher Field, co-chair of the IPCC Working Group ll, warned the group: “The risk profiles are changing—several kinds of climate and weather extremes are increasing and are projected to increase in the future. In the second half of the century, we are looking at a ten-fold increase in the frequency of severe heat events. The most extreme heat waves that we currently experience only once a decade will become annual events.”Field pointed out that we are, in many places, already seeing increases in extremes in heavy precipitation and in the length and severity of droughts. For many poor communities living in areas already exposed to even moderate climate events, such as floods, this is indeed bad news. The people most impacted are those most vulnerable in the developing world—in 2010, the Pakistan floods alone left six million people homeless.Floods are the most frequent of all natural disasters. A recent World Bank paper on cities and flooding estimates that flooding in 2010 affected 178 million people. Unprecedented―and often unregulated and unplanned―urbanization in the developing world, a large part of which is in fertile floodplains and/or coastal regions, is a key cause of increased exposure to flooding. In China, 100 million people have moved from inland to coastal areas in the last 20 years. Globally 600 million people will occupy coastal floodplain land below flood level by 2100.Indonesia knows too well the horrendous impact that disasters can have―the cost in lives and GDP. The 2004 tsunami took more than 200,000 lives. But Indonesia has learned from its disasters.“Indonesia faces more than 100 disasters a year,” said Armida Alisjahbana Minister of National Development Planning, Indonesia. “In 2004, the tsunami cost about 45 percent of Aceh's regional economy. We have tried since to prepare for disasters in a more systematic way—early warning systems in disaster-prone areas, more coordinated efforts, money in our budget to anticipate disasters, a five-year blueprint to prepare for disasters. The key to make coordination work, the key thing is to have a single institution dealing with these issues. We don’t have institutions duplicating work.”The key message from this IPCC report is the need for climate change adaptation, disaster risk management and sustainable development to be integrated into the same agenda in order to help build resilience. But the numbers tell us that we’re not there yet. The world is still spending more on humanitarian aid after a disaster than investing in prevention. According to Andris Piebalgs, Commissioner for Development, European Union, global disaster losses amounted to US$264 billion in 2011. That amount was twice the official development aid in 2011.The World Bank, as a development institution, has been focusing more and more on building resilience. It established disaster risk reduction as a practice group, staffed up, and invested US$6 billion in the last six years in disaster risk reduction to support countries to integrate resilience into their development strategies.“Over the last three years, two-thirds of our country assistance strategies have started to build in disaster risk management. The aim is to get to 100 percent," said Kyte. "We have to change the way we think about infrastructure, agriculture, transportation, water, energy, how communities become resilient, what kind of information we share. We have to help people make infrastructure decisions that will prove resilient far into the future. But we know, too, that we are in an 'adaptation' institution. Climate change adaptation has to be integrated in all we do.”Working Together and Next StepsGFDRR, as the disaster risk reduction (DRR) focal point in the World Bank, is leading assistance to the Government of Mexico to develop DRR as a priority topic for Mexico’s G20 presidency in 2012.Dario Luna, who leads the Insurance, Pensions and Social Security unit in Mexico's Ministry of Finance, is coordinating this initiative for the Mexican government.“We in Mexico give a lot of importance to disaster risk reduction because we are a country that is prone to disasters,” Luna said. “As presidency of the G20, we wanted to put this topic on the agenda―emphasizing the reduction of both human and economic cost. One of the key aspects of our changing world is the increased exposure to natural disasters. We believe that this effort will help DRR gain more prominence in G20 countries and with finance ministers.”A key challenge in the development of risk management strategies based on robust risk information, analysis, and modeling is the lack of systematic tools and methodologies to collect data, assess risk and vulnerability, and inform decision making. A joint Mexico and World Bank public policy publication will be produced on Improving the Assessment of Natural Disaster Risks to Strengthen Financial Resilience, and presented to the G20 summit on 18-19 June in Los Cabos.Naoko Ishii, deputy vice minister of finance for International Affairs in Japan, closed the Resilience Dialogue by announcing that the next high level meeting will be held during the October 2012 IMF-World Bank Annual meetings. The event will be in Sendai, a city in the Tohoku prefecture that bore the brunt of the tsunami last year, and its objective will be to develop a global consensus among the international community to advance the mainstreaming of disaster risk reduction and climate change adaptation as a development priority.“The very timely IPCC Report makes clear that disaster risk management and climate change adaptation measures are essentially two sides of the same coin," Ishii said. "These measures need to be incorporated across various sectors as a key component of development policy."The participants in the Resilience Dialogue talked about how they would meet that challenge―through coordination, bridging humanitarian and development efforts, integrated approaches and by working together to turn the reaction versus prevention paradigm on its head. Show Less -

SEEA: First StepsThe idea of measuring the economic value of clean air, clean water, forests and other ecosystems has been around since the Earth Summit in Rio in 1992. However, it did not gain traction... Show More + because of lack of widely agreed methods for putting monetary values to these services. A major step forward has been the recent adoption by the UN Statistical Commission of the System for Environmental and Economic Accounts (SEEA) of an internationally-agreed method to account for material natural resources like minerals, timber, and fisheries.The implementation of the SEEA was the subject of intense discussion last week among representatives from several countries, NGOs, think tanks, academic and international organizations at the second meeting of Wealth Accounting and the Valuation of Ecosystem Services (WAVES). The global partnership, which World Bank President Robert B. Zoellick announced in Nagoya, Japan, in 2010, has been supporting a number of countries as they prepare to implement natural capital accounting based on the SEEA."Just as private companies look at assets and liabilities on their balance sheets, it’s in a country’s interests to ensure it’s keeping an eye on its assets – and that includes natural assets,’’ said Mary Barton-Dock, director of the World Bank’s Environment Department.How Natural Capital Accounting WorksMost countries follow the System of National Accounts (SNA) – the international standard for measuring national income and national wealth established by the UN Statistical Commission in the 1950s.Natural capital accounting extends the SNA to include in particular, natural resources. It starts with commercial resources like land, forest, minerals, and energy as specified in the SEEA but also includes things that are not measured in markets and whose value and importance to the economy is not easily understood, such as clean water, habitats for fisheries, and wildlife or natural "infrastructure" like mangroves which protect countries’ coastlines.The overarching concept for looking beyond current economic indicators is “wealth accounting” that includes manufactured capital and social and human capital, as well as natural capital.Early AdoptersAt the three-day meeting in Washington, representatives from Botswana, Colombia, Costa Rica, Madagascar, and the Philippines presented their plans for implementing natural capital accounting. A number of these plans have already been endorsed at the highest levels of their governments."Mining and commodities are going to be big in Colombia,” said Carolina Urrutia, deputy technical director at the National Planning Department in Colombia. “We need to put information on the table for a dialogue with other sectors to make decisions about land-use, where to put our resources and how to treat strategic ecosystem services, as they both happen to be in the same areas."The latest partnership meeting reiterated the need for the uptake of natural capital accounting on a global scale. Australia is among the first countries in the world to compile detailed water accounts. “Wealth Accounting is not an ideology,” said Michael Vardon of the Australian Bureau of Statistics. “It provides data vital for informed, sophisticated decision-making and policy analysis. During drought, this exercise provided the information needed to ensure water efficiency in Australia." Show Less -

Adds World Bank Climate Change Envoy Andrew Steer: "This Climate Change Knowledge Portal enables ministers, development institutions, and non-governmental organizations in developing countries to... Show More + see within minutes what’s going to happen 30 or 40 years from now, based on the best scientific modeling that exists in the world. It’s a great tool for opening up discussion on the issues."Opening Climate Data ‘Increasingly Critical’In the past, a wealth of raw data on climate has been under-used, often ending up as static PDFs or on specialists’ hard drives. The new Climate Portal aims to make it easier to access and use climate information from various sources, including the Bank’s open data catalogue."Opening climate data will encourage experts and innovators, wherever they may be, to come up with new tools for analyzing and managing the effects of climate change,” says Shaida Badiee, director of the Bank’s Development Data Group. “The combination of open data and innovative tools will be an excellent resource for countries as they develop plans for adapting to climate change."The portal allows users to query, map, compare, chart and summarize climate and climate-related information, as well as to visualize the effects of changing patterns of rainfall and temperature. It aids government ministries and World Bank teams in 130 countries where adapting to climate change is a development priority.Modeling Risk in MozambiqueThe Global Facility for Disaster Reduction and Recovery (GFDRR), a partner of the Climate Portal, is supporting this effort through its Open Data for Resilience Initiative in 31 countries. GFDRR and government ministries are conducting disaster risk analyses, creating climate data websites, and developing applications to model risk."Making data available is one of the crucial steps toward building resilience to climate change," says GFDRR Manager Saroj Jha. "Open data enables countries to develop the kinds of counter measures needed to deal with extreme events and which must be at the core of every country’s policy and planning."GFDRR expects 15 countries will have climate open data websites by May, and possibly 31 will have them by the end of 2012. Mozambique is likely to be first. The country already suffers from droughts, cyclones and coastal flooding, and is worried about projections that rainfall will decrease during the primary growing season.Mozambique is one of many countries in the world facing such challenges. Mozambique’s disaster management agency and GFDRR are in the midst of building “climate decision” tools targeted to Mozambique’s needs, but which could be made freely available to other countries once they are developed, says Robert Soden of GFDRR’s technical Labs group.One beneficiary could be the Horn of Africa, where the World Bank has committed $1.88 billion to help the region cope with severe drought and build drought resilience. The Bank, with GFDRR and other partners in the effort, including Google, the World Food Program, and the National Aeronautics and Space Administration (NASA), met earlier this month to discuss sharing data. A new Horn of Africa data website will be accessible through the Climate Change Knowledge Portal and the Open Data site."Because there is so much unknown and there is so much data out there, it’s going to be really important that the data is accessible," said Jason Kessler of NASA. "To be able to really meaningfully study and understand what’s going on, it’s going to require as much information as people can get their hands on.""The Climate Change Knowledge Portal is a one-stop shop and will be an invaluable tool both for the Bank team and developing countries alike," says Marianne Fay, chief economist in the Bank’s Sustainable Development Network. "The portal provides an ideal web-based platform to assist in knowledge development, planning and knowledge sharing for green development and resilience to climate change." Show Less -

A Framework for ActionRio 1992 was about setting an agenda for action. We hope Rio+20 will be about realizing that agenda by shifting economic incentives and systems and rallying political will. As part... Show More + of the design of a global roadmap for sustainable development, the World Bank Group suggests Rio+20 strives for agreement on:The adoption by countries of development strategies that are consistent with the concepts of green and more inclusive growth while maintaining a strong poverty reduction focusA global methodology and process for incorporating natural capital and ecosystems services into countries' national accounts by 2030A discreet set of sustainable development goals by 2030 complementing the MDGs e.g. for energy, sanitation, water, land, and oceans, and reinforcing them for biodiversity.We support the three global energy goals outlined in the Action Agenda of the UN High-Level Group on Energy and the United Nations "Sustainable Energy for All" year 2012:Universal access to modern energy servicesDoubling the rate of improvement in energy efficiency, andDoubling the share of renewable energy - all by 2030.We are ready to support efforts to develop more sustainable development goals.Toward a Green and Inclusive Growth PathWe will maintain our focus on growth given its centrality to poverty reduction, but growth needs to be green and inclusive. The world needs a form of growth that is socially and environmentally sustainable that takes resource limits and climate change into account. GDP growth in developing countries will still be necessary to enhance living standards, reduce poverty, and cope with growing populations. But we know that growth per se is not enough. During the recent global economic downturn, some countries continued to see growth at levels of 7 percent a year or more, yet millions of people fell below the poverty line.Green and inclusive growth is climate-resilient, water-smart, land-saving, energy-efficient and reliant on diverse energy sources. It also generates decent jobs and improves livelihoods across a diverse set of productive and service sectors. It is underpinned by properly valued natural capital, the value of which is fully integrated into countries' systems of national accounts. Green and inclusive growth paths factor environmental considerations into government policies and business decisions, placing sustainable natural resource management – with its benefits flowing to people – at the heart of future development and growth. The improved health of people that stems from cleaner air, land and water benefits from and feeds back into this new growth path. Gender equality when recognized as "smart economics" enhances productivity and further improves development outcomes.Enabling the TransitionGreen and inclusive growth policies need to be fully integrated into countries’ overall development strategies and assessed in terms of their contribution to development and well being. Measuring growth with the right tools, promoting sound public expenditure management and fiscal policies, and getting prices aligned with the true value of environmental services are key parts of the transition. The private sector will need to consider how to report on business growth differently, especially in terms of social and environmental value created.These considerations mean that climate and other environmental concerns are no longer the exclusive concern of environment ministries but of government as a whole, especially ministries of finance, economy and development. In addition, Rio 1992 made it clear that these issues are not the exclusive concerns of government. Now, more than ever, the effort to shift growth paths requires the engagement and participation of all parts of society.Measuring green growth also requires new tools. GDP indicates whether an economy is growing, but gives no information on whether the growth is sustainable. That is why putting in place comprehensive wealth accounts that focus on the value of natural capital and ecosystem services, and integrating them into development planning is an important part of mainstreaming green growth.Sound public expenditure management and institutions are critical to ensuring that public spending for sustainable goals is wisely allocated, managed and transparently tracked. Engaging citizens to set priorities and oversee public spending is also essential for transparency, accountability and effectiveness. In developing countries, the role of public policy will also be to remove distortions, barriers and weaknesses impeding private innovation. These efforts can include improving the quality of and access to communications networks, reducing domestic barriers to firm entry and exit, improving access to finance, opening up trade and investment regimes, while at the same time assuring sound environmental and social performance of production and innovation, and strengthening skills and capacity development.The role of fiscal policy is central in allocating public resources to activities with high social and development returns, consistent with green growth principles. Market-based fiscal instruments – like taxes, targeted subsidies, renewable energy feed-in-tariffs, energy efficiency certificates, and emission trading schemes - are critical to ensuring the right incentives for shifting consumption, production, investment and innovation to efficient, clean, least-cost options. Targeted fiscal policies can help create the conditions for the poor to contribute to green and inclusive growth, while reducing unintended costs in terms of public health, social tensions and violence.The role of the private sector in driving the green, inclusive growth agenda needs to be emphasized. Sound public policies and investments are central but are not enough. The private sector is the engine of innovative solutions and the main channel through which the benefits of growth are shared through incomes for rural and urban populations. Green and inclusive growth requires the private sector to operate in ways that decreases its environmental footprint and assures healthy and fair conditions for its workforce. The private sector is a repository of organizational and management expertise that can increase the effectiveness of service delivery, develop new business models and help finance the research and development necessary to transform growth paths.As companies develop more inclusive business models, they will be able to provide goods, services, and livelihood opportunities to underserved populations, creating high development impact in financially sustainable and scalable ways. Growth in businesses that engage with people living at the base of the economic pyramid has so far been driven by talented and resilient business entrepreneurs as well as by value-conscious consumers. Taking successful models to scale will require improvements in many countries' investment climates as well as innovative, long-term investment decisions by the private sector.Establishing innovative financing mechanisms will be vital as sectoral transitions will require significant investments, both public and private. In Rio 1992, the focus was on how to raise new and additional resources, and transactions were assumed to be from developed to developing countries. Now there is a broader choice of private and public finance available which can be mobilized domestically, internationally, and through instruments like the Climate Investment Funds. Targeted international and national public finance, including climate finance, can serve as a catalyst to leverage private sector investment, enhance development policy and lead to transformational change. Developed countries, meanwhile, need to honor their global commitments – such as those agreed at Monterrey (on official development assistance) and Cancun (on climate finance).For middle-income countries, domestic financing options such as green taxes and Payments for Environmental Services are becoming viable options for leveraging financing for environmental investments. In the interim, concessional financing will still be necessary to promote sustainable energy and environmental efforts. Less developed countries will rely more on international transfers and private capital flows to meet their needs to finance the transformation. Private investors will need stable investment climates and different incentive structures, promoting accountability through transparency, and deploying inclusive business models in sourcing and distribution. Financial markets have a key role to play in mobilizing financing that is long-term and suitable to finance the transformation. Special attention needs to be paid to how such innovative mechanisms are structured to ensure that the poor and vulnerable are not further marginalized but are empowered to contribute actively to realizing the goals of sustainable development. Social protection policies can complement such mechanisms so as to ensure that the livelihoods of vulnerable groups are resilient in the face of episodic shocks and chronic stresses.More rapid green growth is inconceivable without technological innovation. Frontier innovations shift out production possibilities, allowing the production of more environmentally-friendly outputs with fewer inputs. For developing countries, innovation includes frontier or "new-to-the world" innovations and adaptation to local conditions, and dissemination of existing technologies.Advancing the green growth agenda requires a systematic consideration of equity, social inclusion, gender, equality and indigenous people’s rights. Environmental degradation is often highly skewed, disproportionately affecting the poor and disadvantaged, where women, children and the elderly are often the worst affected. Carefully designed social protection programs can help alleviate these shocks on the most vulnerable in society. There is growing evidence of the positive links between human development outcomes and more evenly distributed gains from economic growth, higher levels of civic engagement, and the empowerment of women in governance at all levels. The equity agenda goes beyond the use of fiscal and social protection policies as mere compensation for losses incurred by growth elsewhere. Rather, it is a question of harnessing and realizing the economic potential of poor and excluded groups, and ensuring that they have voice and are empowered to contribute to sustainable development.Ensuring the TransformationCombined with an integrated development strategy, the green growth transformation requires targeted action at various levels – globally and locally. Priority action is needed in the following areas that are listed as key topics for Rio+20 by the UNCSD (Rio+20) Secretariat:Infrastructure and Energy: Infrastructure plays a key role in responding to regional and global issues like rapid urbanization, energy sector and sanitation challenges, and climate change. The next five to 10 years present a major opportunity as huge investments in infrastructure will be made across the developing world. For at least the next 25 years, cities will grow by some 250,000 additional people every day – 2 billion more urban residents by 2035. Green growth discourages investment decisions that entrench countries, cities, and communities in environmentally damaging, carbon-intensive systems. There are tremendous win-win opportunities for improving energy efficiency, reducing greenhouse gas emissions, improving air and water quality, tackling urban poverty as well as reducing vulnerability to climate change at the city-level.The three sustainable energy goals put forward by the UN on universal access to modern energy, doubling renewable energy use and improving energy efficiency by 2030 are ambitious but achievable. They are vital for improving the lives of the 1.4 billion people without access to electricity and the 2.5 billion people now using polluting, traditional cooking stoves.Private investments in renewable energy, in particular in solar and wind, have grown tremendously over the past five years, and as the cost of production drops, removing implicit subsidies for fossil fuels will help further transform the global energy balance. There is a need for energy transition, and hydropower represents an important clean energy source which will become a larger share of the world's energy production as lower income countries develop their capacity. Regional power projects and transmission infrastructure will be needed to make best use of available natural resources, including renewable energy resources.Developed and developing countries need to embark on low emission development (LED) paths to sustain growth. An approach that minimizes energy consumption and pollution from transport can be achieved through the adoption of carbon savings technology and sustainable planning of accessible transport services and infrastructure. Strategies for achieving these goals must be gender-sensitive if they are to be effective and benefit those who are most adversely impacted. LED is a critical ingredient to protecting growing urban populations from fine particle inhalation, which often results in increased mortality and morbidity through respiratory and cardiovascular diseases. Reaching WHO-set air quality standards is critical to improving basic environmental health conditions.Measurable targets could include reduction in urban poverty, reduction of greenhouse gas emissions, improved air and water quality, increased energy efficiency in buildings and appliances, reduced energy losses in generation and distribution, and share of trips taken by low carbon modes of transportation. Strong enforcement to reach nationally and particularly internationally-set air and water quality standards is needed.Water and food and energy nexus: A world free of poverty is not consistent with 800 million people without access to safe drinking water, 1.6 billion without access to electricity, and one billion suffering from hunger. Water resources must be allocated between agriculture, energy, urban consumption, mining, and increasingly threatened ecosystems. Population and economic growth are expected to increase demand for food, energy and water further, making the efficient allocation of water absolutely critical.Currently, 70% of the world's withdrawn freshwater resources are being used for agriculture. By 2030, it is estimated that 30-45 percent more water will be required to meet increasing food demands. Already, 50 percent of food globally comes from irrigated areas, and of this irrigation water, 50 percent comes from aquifers which are being depleted at a rapid pace in many countries. And with more than 50 percent of the world's population now in cities, urban centers will increasingly compete with farms for water.Another 15% of the world's withdrawn water resources are being used for industry, mostly for energy production. Hydroelectricity and many solar energy systems – two key alternative sources of clean energy – require water. Stable and ample energy supply is important for water provision and food production. Maintaining biodiversity and ecosystem services also requires an overall decrease in groundwater withdrawal, and these ecosystem services are critical for groundwater supply. To turn these linkages from a vicious cycle into a virtuous cycle, water management must become much more efficient.In addition to the lack of safe drinking water, there are 2.4 billion people living without basic sanitation. To meet the challenges of providing water and basic sanitation to the bottom billion, regressive subsidies need to be removed; sustainable solutions that work need to be scaled up; innovative results-based financing instruments that reward efficiencies need to be promoted; incentives to reduce water use need to be supported; institutional frameworks and water utilities need to be strengthened; and capacity building for service providers in long-term planning needs to be promoted.Oceans: Healthy and biologically diverse oceans are essential for humans, providing food, jobs, recreation, and pharmaceutical resources. Oceans are also the planet's main carbon sink by capturing and storing a large part of greenhouse gas emissions. Today, oceans are absorbing more CO2, which is changing the pH and oceans are becoming more acidic. Climate change is also leading to ocean warming since oceans moderate our climate. Human pollution – approximately 6 million tons of solid waste plus industrial, agricultural and human waste runoff – is also affecting the health of the oceans.Warming, acidification, and pollution are also affecting coral reefs and mangroves. In turn, this "natural infrastructure‟ provides critical ecosystem services at a time when fish resources are already direly affected by over-exploitation. The world's oceans and shared seas provide 20 percent of the animal protein and 5 percent of the total protein in the human diet. They also provide food and livelihoods for 8 percent of the world's population. Bold action to improve governance of marine resources is needed to reverse the loss of habitats, restore fish stocks, and manage coastal environment so that it provides socio-economic benefits for communities and maintains countries' natural resource wealth. Catalytic funding is needed to: move towards rights-based fisheries management, increase marine protected areas, harmonize certification of wild and cultured fish, improve coastal zone management and reduce marine pollution. Currently, only 1 percent of oceans are under some form of protection. For shared seas, in particular, environmental management across all riparian countries is critical.Biodiversity: The planet is in the throes of a sixth great extinction that is liquidating the goods and services on which pro-poor growth and sustainable development depend. IUCN has listed 208 species as "possibly extinct", and a further 17,300 species are considered under threat. We must deliver on the Aichi Targets established at the CBD COP10 in Nagoya, Japan. This includes targets for mainstreaming biodiversity considerations across government and society; reducing the direct pressures on biodiversity; safeguarding ecosystems, species and genetic diversity; and enhancing the benefits from biodiversity and ecosystem services. To do this, countries need to mainstream biodiversity considerations into planning processes and production sectors, set public policy to ensure that the private sector deploys sourcing, production and distribution practices that leverage biodiversity as an asset, strengthen civil society to become an effective partner in protecting biodiversity, and meet targets for safeguarding at least 17 per cent of terrestrial and inland water, and 10 per cent of coastal and marine areas by 2020.Social development: The early years of the 21st century have brought home just how complex, interconnected, hazardous, uneven and uncertain patterns of global development have become. It is increasingly recognized that socially inclusive and resilient as well as environmentally sustainable patterns of growth require attention to good governance, voice and representation for those who are marginalized from the economic and political mainstream. Twenty years ago in Rio, consideration of women was just an add-on. Now, gender equality is part of smart economics as it enhances productivity and improves development outcomes. We expect that gender will be far more prominent in the debate around Rio+20.ConclusionRio 1992 compelled the world to face up to the environmental, social and economic crises of its own making. It put the idea of sustainable development on the table and, to a certain degree, brought about a global shift in thinking – away from "progress at all costs" toward "inclusive growth." It backed up the talk with an agenda for action that, in many ways, defined international efforts for a generation.Rio+20 presents the world with an opportunity to shift the thinking again – this time through a transformation to green and inclusive growth that will be supported by a new kind of GDP – one which acknowledges that growth which depletes natural and social capital is not sustainable. Agreeing on a set of sustainable development goals for 2030 that build on the MDGs will help ensure global efforts are focused.In Rio 1992, government participation was made up largely of environment ministries. At Rio+20 we expect to see much broader participation from ministries of finance, development, and planning. In 1992, women and children were added on to documents under pressure from civil society. Today, gender inclusion is regarded as smart economics. Rio 1992 focused on mobilizing additional financing. Now it is clear that without broader and more innovative financing mechanisms, we will not see results. There is also a realization that transferring knowledge from north to south is not enough. Now knowledge must also flow from south to south and south to north.The World Bank Group itself has come a long way since 1992 – our thinking and actions have shifted enormously towards a focus on sustainable development. We see Rio+20 as a vital agenda-setting moment in history and we embrace the opportunity to put our skills, experience and thinking behind the next phase of global transformation.World Bank Group Actions to Support Green GrowthThe World Bank Group’s comparative advantage is that it can help developing countries try innovative ways to sustainably grow their economies in sustainable ways by leveraging knowledge, fostering innovation, sharing of good practices and lessons learned across the world and building capacity to implement them. We also provide innovative financing instruments and partnerships with public and private sector to fund action along with advice on metrics to measure progress.Our contribution to the Rio +20 agenda is guided by a number of sustainable development sector strategies which include: agricultural and rural development, energy, infrastructure, information and communication technologies, water, oil and gas, transport, urban, social development, manufacturing, mining, and environment. At the program level, our support to meeting the Rio+20 agenda includes:Green Growth Knowledge: The Green Growth Knowledge Platform will facilitate continued work on identifying and remediating knowledge gaps and implementing green growth policies in developing countries. The knowledge platform is also a mechanism to develop partnerships and join "conversations" with an emerging community of practice involving scholars, policymakers, practitioners, and other concerned individuals and institutions in developed and developing countries. The platform will provide online tools for collaboration and discussion on green growth issues. The Bank‟ main partners in this are UNEP, OECD, and the Global Green Growth Institute. We will present a flagship report on green growth providing detailed recommendations for "how."Green issues will play a growing role in the World Bank's ongoing dialogue with finance and economic ministries on fiscal policy, macroeconomic stability, growth, competitiveness, poverty reduction and equity issues. Careful analysis of the growth and distributional impact of environmental pricing policies is needed. The Bank Group will continue to support countries to assess such effects and to design and implement transfers or other social protection programs to help address them. We will also continue working with developing countries to strengthen budget and public expenditure management systems, while paying careful consideration to public oversight and social accountability mechanisms, including systems to evaluate and allocate environmental spending relative to other fiscal priorities and to better ensure that allocated spending is accountably and efficiently used.Wealth Accounting and Valuation of Ecosystem Services (WAVES): Through the WAVES global partnership, launched at the Nagoya CBD COP in 2010, the Bank Group will expand the number of countries undertaking environmental accounting. Already, WAVES is undertaking pilot programs in six developing countries while partnering with developed countries leading the way in the area. WAVES will build knowledge and experience and gradually, broaden the number of countries participating. A key goal of the Bank Group's work in this area is to demonstrate how countries can use environmental accounts to improve decisions about more sustainably managing natural capital.Low-Emission Development: Our Low-Carbon Development Studies, undertaken between 2008-10 in seven client countries, have been scaled up into Development Policy Operations and Clean Technology Fund Investment Plans, among other options. Numerous low-emission development studies have also been undertaken. The creation of a decentralized knowledge platform for low emission development that can provide upstream advice and support to developing countries is being considered with external partners. This includes paying careful attention to the distributional, poverty and social impacts of policies designed to bring about low-emission development, with systematic use of Poverty and Social Impact Analysis (PSIA) to help better inform policy choicesWe will continue to support developing countries with their Nationally Appropriate Mitigation Action plans (NAMAs), enhancing access to the carbon market including through the newly established Partnership for Market Readiness, capacity building activities, and the establishment of innovative financing schemes for LED.The elements of reducing an institution’s footprint (also known as CSR) are fundamental ingredients of a green economy. The World Bank Group will continue to support projects and programs in its client countries to improve environmental and social performance in public and private sector operations. Internally, the World Bank will continue to be 'walking the talk' by continuing to measure and reduce the environmental impact of its own corporate operations to set an example to other public and private agencies.Renewable energy and energy efficiency: Our support for the common goals on access, energy efficiency (EE) and renewable energy (RE) has come in the form of financing and technical assistance. Our work in these areas has contributed to increased access to electricity through grid-based and off-grid electrification. Bank Group support has also helped develop enabling policy reforms, institutional frameworks, and innovative financing for EE and RE projects. IFC has invested, in FY10 alone, $1.7 billion in energy efficiency and renewable energy projects, aiming to increase the relative share of financing into this segment to about 20% of its commitments by 2013. Importantly, IFC financed and advised on, through partnerships with over 60 Financial Institutions around the world, a large and growing portfolio of energy and resource efficiency investments by Small and Medium Enterprises, a sub-set of the private sector which to reach is critical for green growth to take off.The WBG has also built a strong alliance of partners to further these goals. For instance, the Global Alliance on Clean Cookstoves will help distribute nearly 100 million advanced cookstoves, through gender-sensitive strategies, thereby reducing indoor air pollution and increasing safety for the users of these stoves and other household members. Through the Lighting Africa project, WBG in collaboration with the private sector is promoting the market-based provision of safe, affordable lighting based on solar systems to nearly 2.5 million people in sub-Saharan Africa.The goal of universal access to modern energy will benefit from harnessing the power of the private sector. For instance, removing barriers to private sector entry, especially in rural areas far from electricity grid access, will substantially accelerate access to modern renewable energy sources. In countries with some of the lowest rates of access to electricity, the private sector has found new ways of providing rural populations with clean options: biomass-fueled generators using agricultural by-products such as rice husks, sisal or copra are leading to village-sized mini-grids, and photovoltaic-based solar home systems and energy efficient lamps are distributed by private providers at prices affordable to low-income users.The Bank Group plans to increase its investment in preparatory analysis in the area of sustainable hydropower to ensure benefit sharing and adequate social and environmental protections and will also conduct analysis on how best to manage water releases to ensure downstream flow regimes can be managed as sustainably as possible. This analytical work will aim to help clients to adapt their policies and approaches in hydropower to reach their energy goals.The Bank Group is helping to conserve conventional energy resources through a public-private partnership, Global Gas Flaring Reduction. Converting flared natural gas to productive uses will reduce both greenhouse gas emissions and energy poverty.Clean transport: We are committed to addressing the linkages between poverty and social exclusion, environmental quality and human health with efficient transport services. In line with its 2008-2012 business strategy for Safe, Clean and Affordable Transport, the Bank's transport sector seeks to establish the governance, strategies, policies and services that will deliver safe transport for development in a way that is economically, financially, environmentally and socially sustainable. The strategy focuses on reducing GHG emissions which has shifted our lending portfolio accordingly.Climate-smart agriculture: CSA is a core part of the broader green development agenda for agriculture, which is about meeting the needs of people for food, fuel, timber and fiber and contributing to economic development and poverty reduction and food security while maintaining and enhancing the productivity and resilience of natural ecosystem functions.Food security: The IFC has launched a private sector component of the Global Agriculture and Food Security Program to assist in the implementation of pledges made by the G-8 and G-20 to strengthen food security in low-income countries. The program will channel donor funding to support private initiatives developed by client countries to improve governance, productivity, and competitiveness of their agribusiness sectors. Good practice guidelines include safeguards concerning the land rights and natural resource claims of local land users. IFC will provide long- and short-term loans, credit guarantees, and equity to local companies and financial intermediaries. As part of the integrated WBG approach to food security, IFC is providing investment and advisory services to the agribusiness sector across the agricultural supply chain to enhance productivity, help mitigate price and weather-related shocks, and support small and medium agribusiness enterprises, particularly in the poorest countries.Water: The Bank Group will continue to help client countries tackle water issues through a growing portfolio of investment and knowledge that supports improved integrated water resources management, improved irrigation/agricultural water management, and improved access to water supply and sanitation. Water is at the core of many countries' climate adaptation strategies and improved water resources management in the agricultural sector and across sectors, more productive irrigation, and better knowledge about how climate change will affect water variability (eg through more frequent droughts/floods; glacier melt) is fundamental to meet increasing global food demands in a changing climate. Public funding for water is limited but there is growing private sector interest in industrial water-demand management and efficiency, as well as improved wastewater management. Public-private partnerships are helping balance competing demands for access to water and ensure sustainability. The Water Resources Group Entity, a neutral platform where public, private-multilateral, and nongovernmental-organization actors can collaborate on transforming the water sector was formally launched in October, 2011. The entity, which is to be housed at IFC, is the result of a partnership between the World Economic Forum and the Water Resources Group to provide expertise to governments wishing to transform their water sectors.Climate-resilient development: The Bank Group has developed a considerable body of knowledge and experience on climate adaptation through its projects and the Pilot Program for Climate Resilience under the Climate Investment Funds as well as through knowledge products like the Economics of Adaptation to Climate Change. Our experience in developing and implementing innovative climate-related disaster risk financing and insurance tools helps countries reduce, pool, and share climate-related disaster risks, particularly through risk financing and transfer mechanisms. Increasing attention is being paid in this context to how the design of such instruments, and their coherence with complementary social protection and other policies, can help build resilience in the livelihoods of the poor and vulnerable in particular.Sustainable cities: We have a significant work program underway on sustainable cities, with a specific thematic emphasis on climate change. In particular, a knowledge paper on "Towards a Partnership on Sustainable Cities" is being developed, that outlines the framework and elements for sustainable cities, and identifies priorities for action by various sectors and actors. Other recent progress includes: collaboration with the group of 40 cities known as C40; an international standard for measuring city GHG emissions that has been agreed with C40, ICLEI, OECD, UNEP, and UN-Habitat; an Urban Risk Assessment framework; the Mayors' Task Force on climate change, disaster risk and the urban poor; and a guide to adaptation in cities. Implementation of the Eco2 cities program in several pilot cities is underway. A new global initiative on municipal solid waste is also under development. Analytical work is underway that articulates a common definition and standardized measures/tools for sustainable cities, building on initiatives like the Global City Indicators Program. The Bank Group will continue its support to clients in sustainable urban growth and transport, water and sanitation, wastewater management, and climate resilience projects.Oceans: We are exploring options for an Ocean Initiative (OI) with the world's premier ocean-focused organizations, combining cutting edge knowledge with finance for workable solutions to meet country demands for improved marine resource management. Our clients are seeking catalytic funding to move towards rights-based fisheries management, increasing marine protected areas, improving coastal zone management and reducing marine pollution. In line with our open data and transparency agendas, the OI would support knowledge sharing and connecting practitioners.Biodiversity: The Bank Group has accumulated considerable experience in supporting a variety of biodiversity programs around the globe – from saving species to protecting key biodiversity areas as well as supporting civil society to advocate for biodiversity. Our investments and operations demonstrate that biodiversity is a key element of the solution to many global challenges, from food insecurity to climate change mitigation to fuel crises and water stress. Biodiversity conservation and ecosystem-based approaches – employing a range of different institutional arrangements such as protected areas and payment for environmental services schemes, can spur and sustain clean, green and resilient development, generate jobs and attract private investment in the rural frontier, all while reducing vulnerability against natural disasters in an era of adaptation.Social inclusion and gender: The Bank Group is working to ensure that development benefits those who need it most, including women and youth. Women are critical to economic growth and job creation and gender equality is an area of priority focus for results under IDA16, the World Bank's fund for the poorest. IFC is helping increase access to finance and eliminating gender-based barriers to investment. IFC is also working with public and private partners to ensure that youth in developing countries acquire the skills necessary to meet the job opportunities that will emerge as these countries.We are also undertaking analytical work on how climate and other environmental trends affect households and communities, access to opportunities, vulnerability and outcomes. This provides bedrock information for building well-designed policy responses to help the poor and vulnerable adapt to environmental change.In engaging the private sector to create more inclusive business models that would provide goods, services, and livelihood opportunities to people at the base of the income pyramid IFC has deployed targeted investments and used its convening power to share knowledge and promote innovation across the business community. About 150 IFC clients today are using inclusive business models to provide direct benefits to the underserved population at the base of the pyramid, creating high development impact in financially sustainable and scalable ways.Pollution management: We will continue to assist developing countries in scaling-up, accelerating and expanding their initiatives leading to stronger pollution management and environmental health performance. We share good pollution management results and experiences with developing countries through, for example, extensive South-South collaboration and substantive environmental awareness events. An updated Sourcebook on Pollution Management is close to completion.Strategic environmental assessment: Over 100 countries already successfully use Strategic Environmental Assessments (SEA) and Impact Assessments (IA) through directives, policies or laws. SEA and IA help ensure that policies, programs and projects are designed and implemented to have more sustainable outcomes while reducing poverty and advance green economy objectives. Their results are used to inform the development of future proposals. SEA and IA should be recognized as effective high level decision support processes that can assist in the implementation of political commitment to Sustainable Development and Green Economy initiatives. At the Bank Group, SEA is increasingly used in the forestry, mining, water and transport sectors in countries where we are working. Show Less -

November 15, 2010 — Storms, floods, earthquakes, and droughts caused more than 3.3 million deaths and $2,300 billion (in 2008 dollars) in damage between 1970 and 2008. But much can be done to reduce the... Show More + toll from such hazards—even in the face of increased risk from climate change, argues a new book, Natural Hazards, UnNatural Disasters: The Economics of Effective Prevention.The joint World Bank-United Nations publication, released November 11, says natural hazards often turn into disasters as a result of poor policies and practices, such as lack of publicly available information about projected storm surges, or rent-control laws that reduce landlords’ incentives to maintain buildings that then crumble in monsoons.“A deeper questioning of what happened, and why, could prevent a repetition of disasters,” says the book, a two-year collaboration of climate scientists, economists, geographers, political scientists and psychologists.Damages from disasters are projected to grow, making prevention all the more critical. By 2100, even without climate change, damages from weather-related hazards may triple to $185 billion annually and factoring in climate change can then add another $28-$68 billion from tropical cyclones alone, says Natural Hazards.“While we recognize the challenges of the future, we’re not alarmist about it. Doing a better job in preventing disasters today will greatly help prevent disasters tomorrow. And we’re not doing enough today,” says task team leader Apurva Sanghi, senior economist at the Global Facility for Disaster Reduction and Recovery, and a lead author for the International Panel on Climate Change’s forthcoming Special Report on Extreme Events.Cost-Effective Measures PossibleA central message of the book is that “prevention pays, but you don’t always have to pay more for prevention. Countries, governments, finance ministers, even donors can do a lot.” adds Sanghi.For example, Bangladesh, a poor country exposed to cyclones, has successfully put in place early warning systems and benefited from advances in weather forecasting technologies. As a result, it has drastically reduced deaths from cyclones year after year. Bangladesh shows that prevention can be effective even in poor countries, says Sanghi.Cost-effective preventive measures include greater access to hazard-related information and regulatory changes to remove distortions such as abolishing rent and price controls and providing secure titles to encourage better repair and upkeep of buildings. The book also proposes cost-effective, hazard-specific infrastructure: for example, schools that double up as cyclone shelters or roadways that double up as drains.“Even modest increases in spending – and greater sharing of data internationally—can have enormous benefits, especially to warn people of impending hazards,” says the book.The Global Facility for Disaster Reduction and Recovery* (GFDRR) is fostering information sharing through local interventions that promote data collection and early warning systems. Among the GFDRR’s efforts in Haiti, for instance, has been the preparation of a hazard and risk map to guide the installation of refugee camps and the reconstruction of areas damaged in last January’s earthquake.Legal Mandates Not the Only AnswerThe book discusses how, when buildings and infrastructure collapse after hazards strike, public outrage and cries for the government to “do something” often result in “stroke of the pen” measures such as stronger building codes. But such measures are less effective than they sound, the book says, and good building practices can be fostered even without a code, as the rebuilding after the 2005 earthquake in the remote and mountainous region of Pakistan shows.Five years after the earthquake, more than 90% of the 400,000 houses rebuilt comply with safe construction guidelines – not a code mandated by law.Another issue the book raises is that people, often the most vulnerable, live in risky areas not because they are fatalistic or myopic, but to be closer to work. Therefore, zoning for safety often meets resistance.After the 2004 tsunami in Sri Lanka, many people refused to relocate from the coastal area to housing projects away from the coast because the move would disrupt their livelihoods. The law mandating relocation away from coastal areas eventually became so unpopular that it had to be rescinded.Institutions MatterUnderpinning the book’s findings and recommendations is the critical role of institutions in prevention: institutions that increase the public’s involvement and oversight are vital.Deforestation, a major factor in flood and mudslide deaths after hurricanes Ivan and Jeanne struck Hispaniola in 2004, is a symptom of institutions that don’t function well enough to stop hillsides from being denuded, says the book. Haiti has suffered from disasters more than its neighbors, partly because its institutions have been disrupted for many decades, even at the grass-roots level.“By institutions, we don’t just mean just formal, public ones but also, informal ones at the grass roots -- the mechanisms that allow communities to come together and devise their own sustainable prevention measures,” says Sanghi. “It’s about communities having the freedom to organize and involve themselves in coming up with their own solutions. In some cases it could be mangrove belts, in others a sea wall.”Catastrophe Risks ExaminedWhile individuals, communities, cities, and other levels of government can take preventive actions, the largest global risks require a global response, says Sanghi.In a final chapter informed by top climate scientists and economists from MIT, Harvard, Yale, Resources for the Future, and others, the book acknowledges the risk of climate-induced global catastrophes brought on by the melting of the West Antarctic or Greenland ice sheets or the disruption of ocean currents.While the triggers of such events are uncertain, “recent scientific assessments indicate that the risks of climate change generally look worse today than some years ago,” says the book. To manage such catastrophic risks, it proposes a flexible portfolio of measures, including rapid emissions reduction to stabilize greenhouse gas concentrations, and large scale adaptation measures over the medium term.These measures may not be enough to satisfactorily reduce the chance of catastrophes, particularly if the world cannot come to an agreement about sharing the burden of reducing emissions, says the book. It is necessary to consider geoengineering – artificially modifying the planet’s climate – as another potential measure to reduce the risk of catastrophe.*GFDRR is a partnership of 32 countries and six international organizations, including the World Bank, which helps developing countries reduce their vulnerability to natural hazards and adapt to climate change. Show Less -